At least 100,000 HIV-positive children are to receive low-cost drugs for life, using money raised by a tax on flying.

Former US president Bill Clinton said yesterday that the new charges on airline tickets, pioneered by France, meant his Clinton Foundation HIV/Aids Initiative had the buying power to negotiate with drug companies for big discounts.

This year the foundation will receive $350m (£178m), most of it from an airline ticket tax France began collecting this summer. The government charges passengers an extra €4 for every international economy seat and €40 for first-class tickets. Britain has given $25m to the initiative, called Unitaid.

Mr Clinton said that not enough was being done for children in the developing world. "Only one in 10 children who need [treatment] to live get the drugs. That has to change."

The foundation has been able to reduce sharply the price of anti-retroviral drugs. Mr Clinton, speaking after a visit to a new ward for children affected by Aids in New Delhi, said two Indian pharmaceutical companies, Cipla and Ranbaxy, had agreed to supply anti-retroviral drugs for children at prices as low as 16 cents (8p) a day, or $60 annually.

"India should be proud of these companies; they are saving countless lives every day," he said. "We are negotiating for 19 products which are 47% less costly than what is available today."

With 5.7 million HIV-positive people, India has the highest number of HIV cases in the world. The new deal would provide treatment for 10,000 children in India alone by March 2007. Mr Clinton added that the new medicines were also easier to store, transport and use than current drugs.

Mr Clinton was flanked by India's most powerful politician, Sonia Gandhi, and the French foreign minister, Philippe Douste-Blazy, a testament to the networking power he still wields. Mr Douste-Blazy said that by 2008, Unitaid would have a £500m budget. "This is a global issue. We are seeing 1,900 new cases [of children infected with HIV] every day, especially in the countries of the south."

At the last count, India had 202,000 children who were HIV positive. The country has only just woken up to the fact that Aids is killing off the future labour force.

Ms Gandhi, who has made tackling Aids one of her government's priorities, admitted that the country had suffered from a "painful paradox", with Indian companies supplying Aids treatments everywhere but India. "That has changed. At the moment 8% of those affected get drugs [in India]. I am confident that momentum will continue," she said.